Port makes 15-year commitment to coal

By DANIEL RIORDAN

Lyttelton Port Company has signed a 15-year deal with Solid Energy setting terms for coal exports through the port.

Lyttelton will seek shareholder approval for the deal, details of which will be released in a memorandum before a special meeting.

The financial principles underpinning the agreement include:

* A fixed multimillion-dollar annual facility fee irrespective of tonnage for the port's commitment to coal.

* An indexed throughput charge, based on tonnage, to cover operating costs and to contribute to earnings before interest and tax.

* The port meeting the capital cost of new mobile plant.

* Solid Energy having an option to terminate the contract around 2009 if coal exports become uneconomical.

Lyttelton expects to export 1.6 million tonnes of coal this year (to June 30). It is forecasting 2.3 million tonnes next year and says volumes could reach 4 million tonnes.

The company plans a multimillion-dollar upgrade of its coal-handling facilities once shareholders approve the Solid Energy contract.